Thursday Apr.11, 2019

Cord cutting gets less cool

"_What does cord-cutting even mean?_"
"_What does cord-cutting even mean?_"

Hey Snackers,

$1B. As a bonus. One CEO's giving the whole thing to charity.

For the rest of us, stocks edged up as the US and China agreed to the 1st step of a trade agreement: enforcement.

Tube

TV cord-cutting's big day

Over promise, under deliver... T-Mobile followed that weak playbook by unveiling its "Un-Carrier TV" product — The wireless provider's attempt to "replace cable." Society thought it would be big. It wasn't. But the number of TV announcements Wednesday was.

Glad we DVR'd this... It's a lot to take in:

  • T-Mobile: Unveiled its new video package. But it looks just like cable — For $100/month, 150 channels are powered by a remote-controlled box connected to your TV.
  • Alphabet: Jacked up the price for its live YouTube TV offering from $40 to $50.
  • AT&T: The not-so-proud owner of Game of Thrones is reportedly thinking of selling off HBO in Europe for cash to pay down its debt (although the company denied it was true).
  • Disney: The biggest Netflix competitor is Disney+. It launches soon with TV series and movies including Star Wars and Marvel. And it announced Wednesday non-fiction will be on the menu, like delightful cooking shows (Be Our Chef).

Cable might have been better after all... The 3-digit price of T-Mobile's TV shocked us. But it shouldn't have. Hulu, Netflix, and other OG cord-cutters have raised prices over the past year. Add up all your cord-cut subscriptions and the bill looks a lot like cable did (just more passwords to memorize/mooch).

Flight

Delta rises 2% thanks to its "profit puppies"

More peanuts... Delta's quarterly profits just jumped by 31%. The stock's now up 14% this year thanks to its two profit puppies: business class and credit cards. The strong economy has flyers upgrading to the expensive seats, but we're more interested in Delta's Amex plastic partnership.

Long-term commitment... Delta just signed an 11-year extension to its American Express partnership for co-branded credit cards. That SkyMiles card is big for the airline's wallet:

  • Amex pays Delta 1.25-1.50 cents per mile for the points you earn swiping your credit card.
  • That's expected to add up to $7B annually with this new contract by 2023 — That's double what Delta made with the Amex deal last year.
  • Now analysts estimate that 35% of Delta's profits come courtesy of all those Delta Amex cards.

"Emerging High Value Customers"... That's the Delta marketing team's over-thought term for top Millennial fliers. It wants you hooked on its loyalty program because frequent flyer programs are airlines' most profitable service. The co-branded Amex card is how it gets young travelers committed ASAP.

Activism

Amazon's climate policies challenged by 4,268+ workers

4,268 (and counting)... That's the number of Amazon employees asking CEO Jeff Bezos and the Board to be more woke. And they all signed the letter. Their demand: Amazon adopt a "company-wide climate plan" to make the ecommerce icon a better global citizen.

Good timing... Tech comrades at competitors have successfully forced their companies to change policies on sexual harassment and AI ethics. Here's what the Amazonians want:

  • 100% renewable energy: Amazon's failed to set a date to achieve it. Facebook and Google have.
  • Cloud for Oil & Gas: Amazon Web Services (its cloud division) has special services to help energy companies slurp out more oil from the earth.
  • Political donations: The Amazonians list 68 members of Congress that get Amazon donations who are solidly against climate change action.

Sustainability is Amazon's liability... "The Everything Store" has stellar likeability ratings (2019's #2 best corporate reputation). That's despite its business model's impact on Earth. With companies held more accountable for social issues, consumers could push back on ecommerce's carbon footprint: Amazon packing one pen in a desk-sized cardboard box.

What else we’re Snackin’

  • Raincheck: The EU agreed to delay Brexit from Friday to October
  • Fratagonia: Budweiser parent AB-InBev unveils "Patagonia" brew (and gets promptly sued by Patagonia)
  • Rebound: Victoria's Secret gets analyst praise for "modest progress": More diverse models and relaunching swimsuits
  • Owned: LG files a patent for a transparent, foldable phone
  • Revealed: The Fed's minutes from its March policy meeting showed the central bank doesn't plan to raise interest rates in 2019

Thursday

  • Disney's magical "Investor Day" to unveil details on new streaming services
  • Earnings from Rite Aid
  • India's election begins (it's 36 days long. Here's our go-to guide)

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These apps had only been available through VPNs but were popular nonetheless, according to the Wall Street Journal.

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

Exclusive | China Orders Apple to Remove Popular Messaging Apps

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Thanks to a recall of Tesla’s Cybertrucks, we now know how many of them have actually been delivered: 3,878 since the EV company began releasing them to customers in November.

In its third and fourth quarter earnings report, Tesla said that its current Cybertruck production capacity was greater than 125,000 a year. Musk had previously said he expected to produce 250,000 Cybertrucks a year by 2025.

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

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Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

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As such, consumers are starting to see the effects of the largest cocoa supply deficit in over 60 years: “shrinkflation” and reduced-cocoa recipes might soon hit your favorite chocolate bars, and Hershey stock was recently downgraded. Unfortunately, the worst may still be yet to come: the International Cocoa Organization expects production to lag behind demand by 374,000 tons for the 2023-24 season.

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Netflix is going to stop sharing subscriber numbers

After posting subscriber numbers that beat expectations today, Netflix says it’s no longer going to share those numbers starting in the first quarter of 2025. That’s a big deal since subscriber numbers have long been one of the main metrics that investors have looked at.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.